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2008 (3) TMI 367 - AT - Income TaxReligious trust - Charitable Purpose - Refusal to Grant registration u/s 12A/12AA - objects and genuineness of the activities - Applicability of the provisions of section 13(1)(b) can or cannot be looked into at the time of examining the registration application under section 12A - payments to Amil (manager) covered by section 13(1)(c) - HELD THAT:- We have observed that all the objects of the assessee were religious in nature because the same are supported by the writings in Holy Quran and as such the assessee-trust following the directions from the Holy Quran on the religious occasions, religious education and religious activities for Dawoodi Bohra community, had been, organising various activities in pursuance with the objects of the trust and as such the finding of the ld CIT in the impugned order that the objects of the assessee are charitable in nature is not justified. The findings of the ld CIT to this extent are set aside. In view of our finding above that the assessee is a religious trust, the provisions of section 13(1)(b) are not applicable because the same are applicable in the case of trust being established for charitable purposes. The decisions in CIT v. Barkate Saifiyah Society [1993 (11) TMI 13 - GUJARAT HIGH COURT] and CIT v. Chandra Charitable Trust [2006 (7) TMI 96 - HIGH COURT , GUJARAT] by learned counsel for the assessee squarely apply to this case. The findings of the CIT that the provisions of section 13(1)(b) apply to the assessee-trust is therefore, set side. Applicability of section 13(1)(c) - HELD THAT:- In the case of Sarafa Association v. CIT [2006 (11) TMI 93 - HIGH COURT, MADHYA PRADESH] held that the CIT was required to examine the deed as a whole and consider the effect of various balance-sheets on record. The CIT should satisfy himself about the genuineness of the activities of the trust. In the absence of any specific finding in the impugned order with regard to the amount spent by Amil for the assessee-trust, we do not find any justification for invoking the provisions of section 13(1)(c) of the Act because the Revenue shall have to prove while invoking such provision against the assessee-trust that the income was directly or indirectly incurred for the benefit of the person referred to in sub-section (3) of section 13 of the Act. Never the less, this was not the requirement to be considered at the assessment stage as is held in several authorities referred to above. We are of the view that the assessee is a public religious trust and that the action of the CIT in refusing to grant registration to the assessee-trust on the ground of violation of the provisions, of section 13(1)(b) and 13(1)(c) of the Act is not justified especially when the ld CIT had not doubted either the nature of its objects or genuineness of the activities of the trust. In this view of the matter, we set aside the impugned order and direct the ld CIT to grant registration to the assessee-trust under section 12A/12AA of the Income-tax Act. As a result, the appeal of the assessee-trust is allowed.
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